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Thursday, August 19, 2010

I don't care if you're liberal or conservative, authoritarian or libertarian--

Whatever you believe our government should do in the way of programs, policies, and initiatives--
Whatever you believe our government should get its damned nose out of--

You need to look at the national deficit.
I am not going to send you to anyplace that calls this "Babylon" or "Nero fiddling as Rome burns" or a site that whops one President or another, or indeed points fingers at anyone.

I'm going to send you straight to the guys who report it and let you come to your own conclusion.

The Federal Government. The U.S. Treasury. We still have transparency in this country. We need to take a look at the truthful things our government is reporting for us.

The interest we have paid so far to our debtors in the last ten months is:

$375,247,863,222.70

.That's the Interest. It's not the Principal, which means we have paid MORE.

This is from the report of the General Accounting Office (GAO) for 2003. This does point to dates, and leads me to my conclusion as to where to point fingers. However, its Real Value is explaining how we financially transact debt. In short, never mind who's to blame. Learn how it's done.

Cash surpluses during fiscal years 1998 through 2001 enabled Treasury to reduce debt held by the public by $476 billion, from $3,815 billion as of September 30, 1997, to $3,339 billion as of September 30, 2001. Treasury reduced this debt by redeeming maturing debt, reducing the number of auctions and size of new debt issues, conducting “buybacks” of debt before its maturity date, and redeeming callable securities when the opportunities arose.2

However, because of the return to deficits, in fiscal years 2002 and 2003, debt held by the public increased by $585 billion, with about $371 billion of this increase occurring in fiscal year 2003. Treasury issued more debt by increasing the number of auctions and the size of new debt issues. During fiscal year 2003, Treasury reintroduced the 3-year note, which will be offered every quarter. In addition, Treasury increased the offerings of the 5-year note from quarterly to monthly offerings; the 10-year note from an offering every quarter to eight offerings a year; and the 10-year inflation indexed note from three offerings a year to an offering every quarter. Notwithstanding the increases in fiscal years 2002 and 2003, debt held by the public as a percentage of total federal debt has decreased from approximately 71 percent as of September 30, 1997, to approximately 58 percent as of September 30, 2003.

Debt is held by the people/ individual states/ local governments or by the world market. That also tells you who is making the money off of it. For instance, the City of New York (or my Condo Board) might buy a T-bill and fund City Functions with that interest--a no-risk bond that protects the principal and gives back income.

This report tells us that debt is being held 42% by the market and not by the American people. The GAO is telling us also that the old debt was more internal, and when we made new debt, we went external, to get a lot of money fast. This in response to a national security crisis. Oh, do I find that ironic.

So even though I know whose watch this was, and detest this person myself--have even named my vacuum cleaner for this man, because it sucks so much dirt--

It doesn't matter any more. It only matters What We Do.

We need to get this thing corralled. Every other battle we are fighting--for good education here and for literacy in Afghanistan, for soldiers to have body armor and police officer to have it, to increase manufacturing in this country or stop all unsafe manufacturing--Every Single Thing--is affected by this deficit.

I encourage you to look around the Web to find more reasons to hate the deficit. I also encourage you to take stock of your political priorities, whatever those may be, and set them against the frame of the deficit. Let's save that money! Let's reduce our debt! Then, with what we save, we can argue over what to spend it on.

Dear Bob,Yeah, our leaders definitely see little wrong with debt. And its consequences are under-reported--only the panic that CHINA may own it.

It's not that China or anyone else is going to pull the plug. It's that We aren't Making that Money ourselves. We're only Losing it. Our recession is based on it. The programs we pass our limited by it.

Ann T:One of the biggest disappointments to me was what a spend thrift GW Bush turned out to be. Way too much money was spent by his administration--enough that I was wondering if there was any real opposition to him in 2004 that would hold him to account for the money he spent. Unfortunately this only got worse, exacerbated by the two wars going on.

Our government, really since the Great Society era, has been trying to do everything--make war, provide a social safety net, etc.--while there were profound economic changes going on (for example, the decline of manufacturing in the country, starting with textiles.) I think we are going to have to start coming to terms with the fact that we cannot do everything.

Something has to give somewhere. I don't have answers--got more questions--but that's just a few thoughts on the matter.